If you’re thinking about buying a home, you’re likely wondering how you’ll pay for it. So, what is a mortgage, anyway?A mortgage is a loan given by a bank of a lender for the purchase of a home. The loan agreement will outline things such as the interest rate to be paid to the lender, the amortization period for the mortgage, the repayment terms, and the length of the term at which point a renewal will be required, either with the same or a different lender.For the vast majority of homebuyers, a mortgage is an essential part of the purchasing process, and your choices now will impact your finances for years to come. To help make the most of your real estate investment, read on to gain a deeper understanding, so you can make an informed decision when the time comes.Check Your Credit RatingBefore you apply for a mortgage, be proactive and get a copy of your credit report. Once you have it, thoroughly check for errors and other items which may need to be addressed. Since your ability to get a lower mortgage rate largely depends on the information contained in your credit report, it’s important to ensure that all the information is correct.Get OrganizedPrepare the necessary documents in advance. This will save you time and ensure a smooth application process. Depending on the type of mortgage you’re applying for and your employment situation, various documents may be necessary.Get the Stamp of Pre-ApprovalGetting pre-approved helps you understand how much you can borrow before going through the mortgage application process. This is an important step as it will influence your decision on the upper price limit of your purchase, and will provide some realistic boundaries before diving head-first into the process.Consider the FutureYour plans may change, but the end goal should always be to reduce financial risks. Think about how long you’re planning on staying in the house, whether or not you should consider saving for a larger down payment, and how much of a risk you are willing to take.Different Types of MortgagesUnderstanding the options and procedures involved with buying real estate will be hugely beneficial to your plans and finances.Conventional: If you have 20% or more as a down payment on the property, your bank lender will offer you a conventional mortgage.High-Ratio: This allows you to borrow more than 80% of the property’s purchase price. Keep in mind that with this option, you will also have to pay mortgage loan default insurance.Vendor Take-Back Mortgage: This is a type of financing arrangement whereby the seller of a property lends money to the buyer to help them buy it.Assumable Mortgage: The buyer is allowed to take over the same monthly payments at the same interest rate that the seller was paying, until the seller’s original agreed-upon term is completed. At that point, the buyer will need to qualify for a new mortgage.Blanket Mortgage: This is restricted to housing co-ops in most cases, and occasionally condos. The unit owners will pay their own portion of the mortgage either by qualifying for a portion of the blanket mortgage, or by obtaining their own mortgage.Portable: The borrowed is allowed to transfer the loan from one property to another without penaltyBeing well informed is important when buying a home. If you have questions, make sure you reach out to your RE/MAX agent who will be able to help.Connect with a RE/MAX AgentThe post What is a Mortgage? appeared first on RE/MAX Canada.

There’s no denying that Canadian real estate is valued, on many different levels. Owning is a way to plant roots, create security and build wealth. In fact, investing in the housing market how many of the world’s richest people have earned their fortunes, and it’s how many Canadians finance their retirement or build generational wealth.Ultimately, the decision to buy a home is a very personal one that depends on a number of factors, such as your financial fitness, your lifestyle and your future plans. The good news is, professional real estate agents, mortgage brokers and real estate lawyers are there to advise you as you dive in. Here are some important things to consider, to help get you thinking about whether buying a home in the current Canadian real estate market is right for you.5 Questions to Ask Before Buying Canadian Real EstateCan I afford to buy Canadian real estate?Buying real estate involves up-front costs, which can include things like your deposit, down payment, home inspection and appraisal fees, property insurance, land transfer tax, title insurance, legal fees and moving expenses. Click here to explore the cost of home ownership.Then, there are ongoing costs that include property tax, regular maintenance, condo fees if you choose this type of property, and utilities. If you’re saving some money up-front by buying a fixer-upper, you’ll also need to also factor in renovation costs at some point.Here are some strategies to spend less, and save more.Do I have too much debt?When buying real estate, most people will take on a mortgage. Lenders evaluate your costs versus income to determine your qualification. Your Gross Debt Service ratio is your housing costs (mortgage principal and interest + property taxes + heat + 50% of your condo fees, if applicable) divided by your pre-tax income. According to Canada Mortgage and Housing Corp., your GDS ratio should be 39% or less.Then, lenders look at your Total Debt Service ratio: all debt (GDS + car payments + alimony + other loans + the remaining 50% of your condo fees) divided by your pre-tax income. CMHC says your TDS ratio should be less than 44%.Click HERE for to calculate your GDS and TDS.Am I secure in my job?Think about this honestly. Is business bustling? Is the industry in a growth period or is it on the decline? Are you comfortable with the hefty and lengthy financial commitment of home ownership?Speak to your supervisor to get some additional insight. Mortgage lenders like to see stable employment, and you’ll need to provide proof of income in the form of an employment letter or current pay stub, your position and length of employment, and if you’re self-employed, Notices of Assessment from the Canada Revenue Agency for the past two years.Click HERE to find out what else mortgage lenders look for.Am I sticking around?Buying real estate has historically proven to be a good long-term investment. Ask your parents how much they paid for their home 30 years ago, and compare that to current market value. Changed are, their investment has grown. On the other hand, a quick sale can mean financial losses if the home’s appreciation doesn’t surpass closing costs, which are estimated at 1.5% to 5% of a home’s value.Typically, the magic number to stay in the home before putting it back on the market is five years – hence the five-year plan.Do I even want to own a home?People invest in the Canadian real estate market for a slew of different reasons. For homeowners, this is a method of forced savings for retirement and future generations, while also fulfilling the basic need of providing shelter. It’s also a great source of pride for many. Picture yourself in five years. Do you plan to relocate at some point? Where will you work? What’s your family structure? Then, consider how home ownership fits into the bigger picture.If you’re ready to dive into home ownership, a RE/MAX agent can help you find a great neighbourhood, and a place to call “home.”Connect with a RE/MAX AgentThe post Canadian Real Estate: What to Know Before You Buy appeared first on RE/MAX Canada.

Is Atlantic Canada the most affordable place in the country? The eastern seaboard has witnessed an exceptional amount of newcomers over the last few years, though the trend has slowed in recent months. One of the reasons for this is the incredible opportunity to purchase a home that suits the typical family’s budget. But while prices are climbing throughout the region, many households are wondering where exactly is the cheapest place to live in Atlantic Canada. We combed through the data and found the province and its local markets.Where Is the Cheapest Place to Live in Atlantic Canada?Enter: New Brunswick.Over the last few years, the Atlantic Canada real estate market has been booming. Many families, whether in Toronto or Vancouver, are migrating to different parts of the country. One of these places is Canada’s east coast – and for good reason.While Halifax has been on the grow over the last several years, resulting in rocketing home prices, households are exploring other options in one of the most beautiful regions of the country. New Brunswick has been one of them and has jockeyed with Saskatchewan for the top title of Canada’s most affordable housing market.Don’t believe it? According to the New Brunswick Real Estate Board (NBREB), the Home Price Index (HPI) was $308,100 in June, up more than eight per cent compared to June 2023. The benchmark price for single-family homes was roughly the same, while the townhome benchmark price was $299,000. Are you interested in condo living? The benchmark apartment price was $289,300.Local real estate markets in New Brunswick are also quite impressive:Fredericton: $334,512Greater Moncton: $377,693Northern and Valley Region: $216,874Saint John: $332,373Looking ahead, conditions could be mixed amid tightness and a slowdown in inter-provincial migration, says Rishi Sondhi, an economist at TD Bank.“Relatively tight supply/demand balances should keep prices on the rise in Quebec and the Atlantic, although notable affordability deteriorations will prevent even stronger gains,” the bank economist said in a recent research note. “Interprovincial migration has also begun to slow in the Atlantic, weighing on what is likely a key source of ownership demand in the region.”Whether prices will stagnate or decline heading into 2025 remains to be seen.For now, the strength in the Atlantic Canada housing market, like New Brunswick, is its affordability, according to Robert Kavcic, senior economist at BMO.“In most cases, this is a reflection of where Canadians can find affordability and, as a result, where they are moving,” said Kavcic.The latest local real estate association data came after a recent report by Moneysense.ca and Zoocasa, which identified Moncton, New Brunswick, as the top municipality in which to purchase real estate.This is unsurprising, notes Moncton Mayor Dawn Arnold, who told CTV News this past spring that the city’s lifestyle and residents are the primary selling points.“We have kind, compassionate, collaborative people that want to work together that are engaged. They want to be a part of it all. There’s a real feeling of positive energy in our community right now,” said Arnold. “There’s really amazing people in our community.”Housing Supply in New BrunswickNew Brunswick officials confirmed in May that the province fell short of its target of new housing starts in 2023. It also fell behind its regional counterparts that enjoyed an acceleration in housing construction in the first three months of 2024.Nova Scotia and Prince Edward Island slashed sales taxes on new apartment builds and witnessed tremendous growth. However, New Brunswick Finance Minister Ernie Steeves confirmed that the province is not interested in going down that route.Additionally, in an email to CBC News, officials are concerned that tenants might not benefit.“Following some analysis by government, it still isn’t clear that rebating the provincial portion of the HST for real estate developers of purpose-built rental properties would result in benefits to tenants — such as lower, more affordable rents,” wrote Mir Hyder, a spokesperson for the Department of Finance.Kelvin Ndoro, a housing analyst with the Canada Mortgage and Housing Corporation (CMHC), told the news outlet that eradicating the sales tax has supported initiatives to build housing more quickly.“The general view from the developing community is the HST rebates are expediting ongoing projects,” said Ndoro.Ottawa has also embraced this plan. In September 2023, Prime Minister Justin Trudeau announced that the federal government would stop applying a five per cent GST on the construction of new rental buildings.“We are going to be removing the federal GST for the construction of new apartment buildings, and I’m encouraging all provinces to do the same,” said Trudeau on Sept. 14.Property developers could end up paying tens of millions of dollars in sales taxes once the build is finished.Despite a slow start to 2024, new housing construction activity has improved. CMHC data show that housing starts have risen 54 per cent in the first six months of 2024 compared to the same time a year ago, totaling 1,963 units.The post Where Is the Cheapest Place to Live in Atlantic Canada? appeared first on RE/MAX Canada.